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Kayway Investment Ltd v Focus Winner Ltd And Another

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date28 September 2016
Year2016
Citation[2016] 5 HKLRD 267
Judgement NumberHCA967/2013
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA967A/2013 KAYWAY INVESTMENT LTD v. FOCUS WINNER LTD AND ANOTHER

HCA 967/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 967 OF 2013

____________

BETWEEN
KAYWAY INVESTMENT LIMITED Plaintiff

and
FOCUS WINNER LIMITED 1st Defendant
D2 JEWELLERY LIMITED 2nd Defendant

____________
Before: Hon To J in Chambers
Date of Hearing: 9 August 2016
Date of Decision: 28 September 2016

_______________

D E C I S I O N

_______________

Background

1. This is the Plaintiff’s application by summons, pursuant to Order 45 Rule 8 of the Rules of the High Court and the inherent jurisdiction of the court, for leave to enforce the summary judgment which was entered against the Defendants on 30 April 2015 (the “Judgment”).

2. The Plaintiff is the owner of the exterior wall (“Exterior Wall”) of Kaiser Estate 2nd Phase in Kwun Tong (“the Building”) since 16 February 2012. The rights and obligations of the co-owners of the Building are governed by a Deed of Mutual Covenant (the “DMC”). I have found, on a proper construction of the DMC that “Exterior Wall” means the entirety of the external wall enclosing the Building.

3. The 1st Defendant is the registered owner of Units J, K and L on the ground floor of the Building (“the Shop”). The 2nd Defendant is an associated company incorporated in Hong Kong and held by the same sole shareholder, D2 Limited. It operates a jewellery business in the Shop and used to trade under the name of “D2 Jewellery”. Since the Judgment, it has changed its trading name to “D DRAX 蒂廷珠寶 JEWELLERY”.

4. When the 1st Defendant acquired the Shop, part of the exterior walls on the ground floor had been removed by its predecessor in title to enable the premises to be used as an open showroom. What is left of the exterior wall on the ground floor is the existing wall as it now stands and as coloured pink in the plan marked ‘A’ attached to the Amended Defence (“the Existing Wall”). In reading this decision, it is important to bear in mind that the Existing Wall is part of the Exterior Wall referred to in the Judgment and in the DMC, of which the Plaintiff has the right to exclusive possession.

5. The 2nd Defendant erected and fixed two signboards on the Existing Wall, one facing Man Yue Street and the other one facing Man Lok Street. On the basis of the incontrovertible facts and my construction of the DMC, the 2nd Defendant’s act clearly amounted to trespass.

6. On 30 April 2015, I allowed the Plaintiff’s application for summary judgment. I granted the 1st Defendant conditional leave to defend but entered summary judgment against the 2nd Defendant. As against the 2nd Defendant, I made the following order (the “Order”):

(1) judgment on liability be entered with damages to be assessed;

(2) removal of the trespassing structure and delivery of vacant possession of the trespassed area to the Plaintiff within three months from the date of the Judgment;

(3) interim lump sum payment to the Plaintiff in the sum of $24,000 per month from 16 February 2012 until the date of the Judgment, i.e. the sum of $936,000 ($24,000 x 39), within 14 days;

(4) interim monthly payment in the sum of $24,000 thereafter on the 16th day of each month until conclusion of the assessment of damages or removal of the trespassing structure whichever the earlier; and

(5) costs of the application to be taxed if not agreed.

Neither of the defendants appealed.

7. The two signboards, i.e. the trespassing structure, which should have been removed by 30 July 2015, were not removed. The Defendants made the lump sum payment and interim payments up to 15 July 2015. What took place in the interim was as follows.

8. Hoardings were erected around the trespassing structures in about May 2015 and building works appeared to be in the process of being carried out. Towards the end of June 2015, the Plaintiff’s solicitors wrote to the 2nd Defendant’s solicitors to enquire about the progress of the removal work, but the 2nd Defendant’s solicitors did not respond.

9. On 30 July 2015, the hoardings were still there. On 21 August 2015, the Plaintiff’s solicitors wrote to the 2nd Defendant’s solicitors enquiring about the progress. Again, the 2nd Defendant’s solicitors did not respond.

10. By the end of September 2015, the hoardings were removed. The former signboards complained of (the “original signboards”) were removed, but the trespassed area, i.e. the Existing Wall, is covered by two apparently new signboards with the name of “D2 Jewellery” (the “new signboards”).

11. On 15 October 2015, upon the application of the Plaintiff by affirmation, judgment was entered against the 1st Defendant for failure to comply with condition, i.e. removal of the trespassing structure and making interim payment.

12. On 23 November 2015, the Plaintiff took out the present summons seeking leave to enforce the Judgment against the 2nd Defendant.

13. In February 2016, the name on the new signboard was changed to “D DRAX 蒂廷珠寶 JEWELLERY”.

The parties’ case and the issues

14. The Plaintiff does not dispute that the original signboards were removed and replaced by new ones. The basis of Plaintiff’s application is that the new signboards are attached to the Existing Wall and are still trespassing the Existing Wall. Alternatively, even if the new signboards are not attached to the Existing Wall, the 2nd Defendant is still in breach of the Order in not having delivered vacant possession of the Existing Wall to the Plaintiff.

15. The 2nd Defendant’s case is that the original trespassing structure had been removed. The trespass ceased and the Order complied with. The new signboards which have been erected at the same position are not attached to the Existing Wall at all and there is no trespass of the Plaintiff’s property. Even if trespass or some other tortuous acts have been committed, they would only give rise to some new causes of action. The Plaintiff cannot enforce the Order on a new trespass or new cause of action.

16. The issues raised by this application are:

(1) What are the 2nd Defendant’s obligations, specifically as regards delivery of vacant possession, under the Order?

(2) Are the new signboards trespassing on the Existing Wall, specifically are they in any way attached to the Existing Wall and how are they secured?

(3) Has the Order been complied with, specifically has vacant possession of the Existing Wall been delivered to the Plaintiff?

The 2nd Defendant’s obligation to deliver vacant possession

17. Paragraph 2 of the Order reads:

“The 2nd Defendant do remove of the trespassing structure and deliver vacant possession of the trespassed area to the Plaintiff within three months from the date of the Judgment;”

18. This particular paragraph of the Order is in simple language which the parties have no difficulties in understanding. The Plaintiff sought to apply for leave to amend the Summons during the court’s vacation to specifically identify the “trespassing structure” and “the trespassed area” to mean respectively the original signboards and those parts of the Existing Wall to which they were attached. The application was made during the court’s vacation and without leave. Mr Chain confirms that the 2nd Defendant has no misunderstanding what these terms mean. The application is disallowed as being unnecessary and not properly made. The 2nd Defendant’s obligation is, first, to remove the original signboards and, second, to deliver vacant possession of the Existing Wall formerly occupied by the original signboards.

19. The parties are in dispute as to the 2nd Defendant’s obligations in delivering vacant possession under the second limb of the Order. Mr Vaughan, counsel for the Plaintiff, submits that vacant possession means actual unimpeded physical enjoyment of the land in issue. Mr Chain, counsel for the 2nd Defendant, argues that that is a concept under the law of landlord and tenant only which has no application to the parties not under such a relationship. He submits that once the trespassing structure is removed, vacant possession is delivered.

20. Mr Vaughan referred me to the case of Toho Limited v Ng Sik Yu[1]on the meaning of vacant possession. That case is very similar to the present one. The plaintiff was the owner of two shops on the ground floor of a building. He let part of the external wall consisting of columns and the space in between of 12 feet in length and 1.5 to 1.6 feet in width (referred to in the judgment as the “wall space”, which was in fact a horizontal space bounded on one side by the wall) to the defendant for operating a street stall. The stall was 12 feet by 3 feet. Thus part of the stall rested on the leased area and part on government land. In 1977, the defendant obtained a hawker stall from the Urban Council to operate as a wall stall hawker at that location. In 2002, he demolished the original stall and erected a new one. The new one was much smaller, being about 4 feet 5 inches by 2 feet 7 inches and was 2.5 inches away from the wall. He ceased to pay rent. The plaintiff’s case was founded on forfeiture and nuisance. At first instance, the District Court held that vacant possession of the wall space had been delivered by the defendant.

21. On appeal, the Court of Appeal reversed the judgment of the District Court and held that vacant possession had not been delivered. Cheung JA said that the right to vacant possession means actual unimpeded physical enjoyment of the wall. The impediment does not mean any impediment but one which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property. He referred to the authorities and explained the rationale of this principle as follows:

“11. …The right to vacant possession means...

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